CCMA, Nedlac, Productivity SA Quarters 3 & 4 performance; with Deputy Minister

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Employment and Labour

19 August 2020
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

In this virtual meeting, the Committee was briefed on the 2019/20 Quarters 3 and 4 performance of three entities of the Department of Employment and Labour.

The Commission for Conciliation, Mediation and Arbitration (CCMA) showed lower performance in Quarter 3 than the previous year; however, the Director noted that the performance balanced out in Quarter 4 as it had in previous years. He noted the different definitions for ‘essential service’ as provided by the Labour Relations Act (LRA) and the Disaster Management Act which made it difficult for them to achieve certain targets. He pointed out that the point of correction would be through the legislature. The CCMA has had operate differently in the ‘new normal’, as a result of COVID-19, which has started a process that will hopefully reveal a new CCMA in the years to come.

Productivity SA managed to achieve 100% of targets for both Quarters 3 and 4. PSA’S strategic objective ‘to financially assist enterprises’ was not set as a target due to a lack of funding. The CEO commended the PSA’s ability to raise revenue of R11 million in 2019/20. If PSA could increase that to R20 or 30 million, then it would be a self-sustainable entity. An outstanding audit finding from 2018/19 on non-compliant HR policies was close to being resolved.

Nedlac's Executive Director said it had performed reasonably well despite the start of Quarter 3 characterised by management instability and Quarter 4 ending with the worldwide pandemic. Mitigating measures and consequence management were implemented where targets were not achieved as a result of staff negligence. The pandemic opened up the entity to a new environment of operating virtually. Through their programmes, they managed to create 44 851 jobs. By the end of Quarter 4 a new CFO and Executive Director were brought on board while the disciplinary cases of the former were under way.

Members asked PSA and CCMA if they would work together in future to help save jobs. Both agreed and the CCMA alluded to a plan in the pipeline. Members requested feedback on the investigations into the CCMA audit findings on irregular expenditure. How the CCMA was dealing with the difference in definitions of ‘essential service’. They asked how CCMA was approaching its work in the 'new normal', particularly the commissioners.
 

Meeting report

Deputy Minister’s overview
Deputy Minister Boitumelo Moloi noted apologies from the Minister who had to attend a Cabinet committee meeting but she welcomed him back in absentia from sick leave. Their aim in the next three meetings would be to brief the Committee on the quarterly performance of the Department of Employment and Labour (DEL). She noted that the majority of the items presented had already been accounted for in the July supplementary budget debates. They would brief the Committee on the Compensation Commission and the UIF in the upcoming week and on DEL on 2 September.

She said South Africa had not been immune from the challenges brought by the pandemic such as job losses, food shortages and other humanitarian concerns. The pandemic had disrupted their plans and ability to achieve what needed to be achieved as a Department but, God willing, they will keep working towards delivering on their planned targets.

CCMA presentation
Mr Cameron Morajane, CCMA Director, stated that in Quarter 3 they did not achieve four of the seven targets. Overall achievement stood at 43% for the quarter. He provided reasons why each of these targets were not achieved.  Looking at a comparison to previous years, Quarter 3 was lower but he assured the Committee that although it looked like low performance, it corrected itself later on in Quarter 4. He not that job saving for employees facing retrenchments was at 42% which was above the target they had set.

The CCMA and the Minister had been involved in job saving during the pandemic. During Alert Level 5 lockdown, the CCMA was called on at different occasions to intervene in many enterprises to prevent job losses. In most cases they had to prevent unprotected strikes. A specific example was an unprotected strike at the main Pick n Pay distribution centre where they intervened at two in the morning. This was to ensure the country would not be subjected to loss of food supply and job losses from the unprotected strike. He added that job saving needs to see a revision in its approach in the ‘new normal’. The function of job saving had expanded beyond the section 189 process. There was a need for a ‘new normal’ approach to job saving. He made mention of interventions under section 150; that they are able intervene in matters that are not specifically referred to them. Of those public interest matters they settled 74%. He pointed out that the CCMA was currently conciliating cases within 23 days which was better than the 30-day target.

Moving on Quarter 4, he pointed out that they only achieved 14 out of 19 targets. Overall achievement stood at 74 percent, confirming that the low performance in Quarter 3 sorted itself out. He noted that administrative errors in the arbitration awards were the reason for not achieving two of the targets which was similar to Quarter 3.    

The non-achievement of Target 5 which was to monitor the compliance and observance of two Essential Service Designations, was due to rising COVID-19 pandemic. He noted the difficulty of dealing with different legal definitions for ‘essential service’ as it appears in the LRA and Disaster Management Act.  
Overall, CCMA finances were spent according to targets. He noted that their commissioners are independent contractors when they submit their invoices. For irregular expenditure, there are 49 ongoing investigations arising from audit findings and investigations. 

Ms Kedibone Mashaakgomo (CCMA CFO) highlighted that four of these have been deemed not to be irregular expenditure. However, there are ten new cases to be investigated. 

Productivity SA presentation
Mr Mothiba Mothunye, PSA CEO, said that in Quarter 3, they had managed to achieve all the targets set. An exception was Strategic Objective 3 which is to support enterprises facing economic distress and initiatives aimed at preventing job losses. PSA could not set targets for this because of lack of funding. Key areas of performance included supporting 3261 enterprises to improve productivity and business efficiency compared to the set target of 2785. PSA trained 142 Education, Training and Development practitioners and Skills Development Facilitators compared to a set target of 40.

In Quarter 4, they achieved 100 percent productivity achieving all targets for each programme. They managed to support 3686 enterprises against a target of 3100. They improved in governance and regulatory compliance, drastically reducing wasteful and irregular expenditure.

He pointed out that in terms of section 40(b) of the Employment Services Act, Productivity SA is permitted to generate its own revenue and it managed to generate 11 million in 2019/20. Looking at the overall performance, PSA improved in productivity as the year went on, finishing the year on a positive footing.

Dr Sibusiso Sabela (CFO) gave information on the financial performance. PSA gets money from various sources including the Department of Employment and Labour, the Unemployment Insurance Fund and through the provision of services. He echoed the CEO’s statement on revenue creation and state that the intention was to raise that amount to R20 to 30 million. In doing so, the PSA could be a self-sustained entity. PSA was able to meet its financial targets due to resignations and it was able to continue operating without replacing those employees.

Of the audit findings for 2018/19, they could not resolve one finding on HR policies as there was a misalignment in their internal HR policies with the legislation. But to date, they managed to clear those findings whilst this outstanding item was close to being resolved.

Nedlac presentation
Ms Lisa Seftel, Nedlac Executive Director, stated that at the start of Quarter 3, there was significant management instability and the end of Quarter 4 coincided with the COVID-19 pandemic which led to a very different set of activities for Nedlac. On the whole, it managed to meet majority of its targets. They had 15 performance indicators for Quarter 3 and 14 were achieved representing 93% achievement. One target dealing with the conclusion of the Nedlac Report on the Integrated Resource Plan had been achieved earlier.

A key performance area in Quarter 3 was the Draft ICT Strategic Plan which was developed to ensure that the ICT environment for Nedlac was responsive to its business needs. They had also engaged on measures to address the challenges of the State-Owned Enterprises with much focus on Eskom and electricity supply. One unachieved target was to submit a progress report on the Decent Work Country Programme and adequate consequence management was implemented for the non-complying staff members.

Moving on to  Quarter 4, 14 of the 16 performance indicators were achieved representing 88%. Key issues addressed in this quarter included the establishment of the Nedlac COVID-19 Rapid Response Task team. The task team played a role in developing measures to mitigate against the impact of COVID-19 and lockdown on the lives and livelihood of South Africans.

Nedlac considered the report by the Labour Market Chamber, arising from engagement on challenges encountered by the CCMA and recommendations were made by the Chamber to address the identified challenges. Nedlac appointed a new Chief Financial Officer and Executive Director which brought much needed leadership stability to the institution. At the end of Quarter 4, a total of 44 851 jobs were created through Nedlac's various programmes.

She presented Nedlac expenditure with Quarter 4 ending with a surplus of R1.9 million. She noted the legal fees related to the ongoing disciplinary cases of both the former Executive Director and CFO.

On the whole, Nedlac performed well under the circumstances.  The third and fourth quarter could not have anticipated the changes including the shift to online meetings, remote working and the need to respond rapidly to the health and economic crisis. However, Nedlac adapted and continued working. 

Discussion
Mr M Baigraim (DA) asked the CCMA if it could work with Nedlac and PSA in dealing with the retrenchments and job losses ahead. On the matter of essential service, he praised them for the work it had done thus far.

Mr N Hinana (DA) asked the CCMA how it is dealing with the difference in definitions of ‘essential service’ between the Labour Relations Act and the Disaster Management Act. How are the differences being reconciled? Have any steps been taken to have a uniform definition across all sectors? 

Ms N Ntlangwini (EFF) asked the CCMA for clarity on the four resolved cases of irregular expenditure and asked under which areas the 10 new cases fall. She asked if the CCMA could provide contact information of all the branches in the country for the purposes of the EFF Labour Desk.

Ms Ntlangwini asked Productivity SA about the figures in its targets and if it went beyond the targets.

The Chairperson asked PSA to provide a breakdown of the work being done provincially.

She asked the CCMA if the administrative errors made by commissioners in the arbitration awards was an acceptable occurrence or if it was beyond their control? She would be unhappy if these errors were simply accepted as commonplace. She was pleased that they had noted the differences in the definition of 'essential service' between the two Acts.

CCMA response  
Mr Morajane replied that a new level of engagement was in the pipeline particularly with the PSA, because the two entities already work together and complemented each other. The solution to the problem of the differing definitions of 'essential service' is legislative and not operational. All they can do is educate on the difference in the two Acts. They were forced to react and apply the Disaster Management Act definition of essential service.

Mr Morajane replied that the CCMA is not operating from their offices, but only the parent office. They are working on new approaches such as call centres and establishing a digital presence. He explained that the administrative error is a mixed bag of innocent human error and events beyond their control such as system problems but also there were cases of negligence. Those who had been negligent had been punished.

On the CCMA irregular expenditure, Ms Mashaakgomo replied that in the investigations, those four cases were found to be not irregular. The matter was handled by the Loss and Control Committee. The 10 new cases dealt with operating expenditure and supply chain procedure was not adequate for the goods procured.

Productivity SA response
Mr Mothunye confirmed the relationship between the CCMA and PSA. The PSA presentation showed that it had overachieved on the targets they had set. He promised to provide the supplementary performance information per province.

Further questions
Ms Ntlangwini asked for more information from the CCMA on the supply chain management of the ten new irregular expenditure cases when the investigations are done either by way of presentation or in written form. She asked again for contact details of the CCMA offices and the Compensation Fund offices as well. 

The Chairperson wanted to know how the CCMA was navigating the ‘new normal’ referring to the commissioners. Were there going to be new complexities and what would be the new approach by the commissioners? Did the CCMA envision extra training for the commissioners? She affirmed that the CCMA should submit the contact details.  

CCMA response
Mr Morajane replied that the CCMA was already operating in the new normal. There was a change in the system and method of dealing with cases. They will have to find new ways of receiving and setting down cases with less contact. They would need to establish a firm digital presence and consider using the workplace of the employer to minimise travel. For new cases, consultation could adequately happen via Zoom calls, reducing the distance that people have to travel except in the case of the severely underprivileged. Users will have to be educated on the new way of doing things to minimise risk. He would like the CCMA to be accessible not only in towns but also in suburbs in bringing the CCMA to the people.

On commissioners, there is a need for different types of commissioners. Particularly for commissioners dealing with cases on employment equity. He referred to the ILO Convention 190 on Violence and Harassment adopted in 2019 and its impact on the Employment Equity Act’s definitions of harassment and the like. Considering the problem of gender based violence in South Africa, the Court has said that when dealing with cases  of harassment, it requires commissioners to be sensitive and empathetic without compromising their independence and neutrality. A new CCMA is under development and by the end of three to four years the CCMA will have a new look. The new normal has exposed many functions which have been redundant throughout the course of this pandemic. The new normal has its negatives and positives.

The Chair offered Director General Thobile Lamati​ a chance to speak but he had no remarks.

Deputy Minister Moloi said that they are always ready as a department to come and give an accounting of the work they do. They are committed to doing better in those areas where they were not able to achieve. They are committed to giving full support to the Portfolio Committee and avail themselves whenever needed.

The Chairperson thanked the Deputy Minister and her team. She asked that the Director General attend to the request for contact details. On job retrenchments, they need to acknowledge and accept that some workspaces will not be able to pick up as the lockdown is eased. This calls for them to think of innovative and the best way for approaching this without apportioning blame to the Department that it is failing to create jobs. This would need collective work without political distinction. Both the Executive and Parliament are responsible and should work together to leave a lasting legacy in moving past the difficulties they are facing.

The meeting was adjourned.

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